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Update on the group's performance for the four months to 30 April 2016
Standard Bank Group Limited
Registration No. 1969/017128/06
Incorporated in the Republic of South Africa
JSE share code: SBK
ISIN: ZAE000109815
NSX share code: SNB
NSX share code: SNB ZAE000109815
(“Standard Bank Group” or “the group”)
Update on the group's performance for the four months to 30 April 2016 and capital
adequacy, leverage ratio and liquidity coverage ratio disclosure at 31 March 2016
1. Update on the group's performance for the four months to 30 April 2016
At the annual general meeting to be held later today, group chief executives Sim
Tshabalala and Ben Kruger will refer to this update regarding the group's performance
for the first four months of 2016 in comparison with the equivalent period for 2015.
Banking activities
The economic conditions in South Africa, and across a number of the African countries in
which the group operates, remain challenging. Despite this, group income growth has
been good, supported by strong growth in net interest income. As expected, the group
has seen some strain in the associated credit environments resulting in an increase in
the group’s credit impairment charges. Expense growth was higher than income growth,
exacerbated by the weaker rand, but remains within internal expectations. Management
remains focused on delivering return on equity in the medium term target range of 15%
to 18%.
Liberty Holdings Limited (“Liberty”)
Shareholders are referred to the Liberty operational update on 19 May 2016 wherein,
referring to the first quarter of 2016, the following comments were included:
“The performance of the group for the three months to 31 March 2016 continues to
reflect the trends observed in the final quarter of 2015. Increasing pressure on consumer
disposable income, volatile investment markets and lower economic growth have
impacted both net customer cash flows and indexed new business. Returns on the
shareholder investment portfolio were behind benchmark for 2016 but remain well ahead
of the three year cumulative benchmark. Assets under management amounted to R671
billion (31 December 2015: R668 billion).”
As noted in the group’s Annual Integrated Report, published on 25 April 2016, the lock-in
period for the group’s Black Economic Empowerment initiative ended on the 31
December 2014, the remaining participants’ interest has a negligible impact on the
group’s International Financial Reporting Standards (“IFRS”) results and the group will
revert to IFRS as its primary reporting basis in 2016.
2. Basel III capital adequacy, leverage and liquidity coverage ratio disclosure as at 31
March 2016
In terms of the requirements under Regulation 43(1)(e)(iii) of the regulations relating to
banks and Directive 4/2014 issued in terms of section 6(6) of the Banks Act (Act No. 94
of 1990), minimum disclosure on the capital adequacy of the group and its leverage ratio
is required on a quarterly basis. This disclosure is in accordance with Pillar 3 of the Basel
III accord.
Standard Bank Group capital adequacy and leverage ratio
31 March 2016
Rm
Ordinary share capital and premium 17 952
Ordinary shareholders' reserves1 135 641
Qualifying common equity tier I non-controlling interest 6 048
Regulatory deductions against common equity tier I capital (34 216)
Common equity tier I capital 125 425
Unappropriated profit 14 828
Common equity tier I capital excluding unappropriated profit 110 597
Perpetual preference shares 3 297
Qualifying tier I non-controlling interest 410
Tier I capital excluding unappropriated profit 114 304
Tier II subordinated debt 18 541
General allowance for credit impairments 2 455
Tier II capital 20 996
Total qualifying capital excluding unappropriated profit 135 300
Total minimum regulatory capital requirement2 99 501
Credit risk 72 418
Counterparty credit risk 2 348
Equity risk in the banking book 1 418
Market risk 5 352
Operational risk 14 158
Threshold items 3 807
Capital adequacy ratio (excl unappropriated profit)
Total capital adequacy ratio (%) 14.1
Tier I capital adequacy ratio (%) 11.9
Common equity tier I capital adequacy ratio (%) 11.5
Capital adequacy ratio (incl unappropriated profit)
Total capital adequacy ratio (%) 15.7
Tier I capital adequacy ratio (%) 13.5
Common equity tier I capital adequacy ratio (%) 13.1
Leverage ratio
Tier I capital (excl unappropriated profit) 114 304
Tier I capital (incl unappropriated profit) 129 132
Total exposures 1 869 160
Leverage ratio (excl unappropriated profits, %) 6.1
Leverage ratio (incl unappropriated profits, %) 6.9
Notes:
1
Including unappropriated profits.
2
The minimum capital requirement excludes any bank-specific capital requirement and is
reported at 10.38%.
The Standard Bank of South Africa Limited and its subsidiaries capital adequacy and
leverage ratio
31 March 2016
Rm
Common equity tier I capital1 67 101
Tier I capital1 67 101
Tier II capital 16 076
Total qualifying capital1 83 177
Unappropriated profit 6 784
Total minimum regulatory capital requirement2 61 050
Credit risk 45 926
Counterparty credit risk 2 090
Equity risk in the banking book 1 258
Market risk 2 893
Operational risk 8 269
Threshold items 614
Capital adequacy ratio (excl unappropriated profit)
Total capital adequacy ratio (%) 14.1
Tier I capital adequacy ratio (%) 11.4
Common equity tier I capital adequacy ratio (%) 11.4
Capital adequacy ratio (incl unappropriated profit)
Total capital adequacy ratio (%) 15.3
Tier I capital adequacy ratio (%) 12.5
Common equity tier I capital adequacy ratio (%) 12.5
Leverage ratio
Tier I capital (excl unappropriated profit) 67 101
Tier I capital (incl unappropriated profit) 73 885
Total exposures 1 363 441
Leverage ratio (excl unappropriated profits, %) 4.9
Leverage ratio (incl unappropriated profits, %) 5.4
Notes:
1
Excluding unappropriated profits.
2
The minimum capital requirement excludes any bank-specific capital requirement and is
reported at 10.38%.
Liquidity coverage ratio disclosure
In terms of the Basel III requirements in Directive 11/2014 issued in terms of section 6(6) of
the Banks Act (Act No. 94 of 1990), minimum disclosure on the liquidity coverage ratio (LCR)
of the group and the bank is required on a quarterly basis. This disclosure is in accordance
with Pillar 3 of the Basel III liquidity accord.
The LCR is designed to promote short-term resilience of the 1 month liquidity profile, by
ensuring that banks have sufficient high quality liquid assets (HQLA) to meet potential
outflows in a stressed environment. The minimum phase-in LCR requirement for 2016 at
70% on 1 January 2016 and will increase by 10% each year to 100% on 1 January 2019.
Standard Bank Standard Bank of
Group Consolidated South Africa Solo
31 March 2016 31 March 2016
Rm Rm
Total high quality liquid assets 182 176 124 086
Net cash outflows 183 250 153 706
LCR (%) 99.4 80.7
Minimum requirement (%) 70.0 70.0
Notes:
1. Only banking and/or deposit taking entities are included and the group data represent an
aggregation of the relevant individual net cash outflows and HQLA portfolios.
2. The above figures reflect the simple average of the month-end values at 31 January
2016, 29 February 2016 and 31 March 2016, based on the regulatory submissions to the
South African Reserve Bank.
The information contained in this announcement has not been reviewed and reported on by
the group's external auditors.
Johannesburg
26 May 2016
Lead sponsor
The Standard Bank of South Africa Limited
Independent sponsor
Deutsche Securities (SA) Proprietary Limited
Namibian sponsor
Simonis Storm Securities (Proprietary) Limited
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